Google Place Search – the potential impact on retailers without physical stores

Last week, Christos explained a number of changes to how Google displays local search results. Following on from his general observations, I take a look at what it might mean for retailers, particularly online-only retailers, who by their very nature do not have a physical store, or ‘local footprint’ if you like…

No ‘local footprint’? No problem!
Bluntly, not having a physical store might not matter that much. As Amazon’s success proves, there are millions of people who are perfectly happy to buy certain types of products without the need to touch, taste or smell the product, and will continue to do so. We assert that Amazon’s brand loyalty will not be threatened by Google’s developments, simply because we anticipate customers and prospects go to Amazon directly (either because they are already saved in favourites, or their brand is so familiar people type in the URL directly so are more likely to bypass search engines in the first place).
No ‘local footprint’? Might (might!) be a problem…!
Take a different sector though – let’s consider clothes retailing. How do brands such as ASOS or Boden respond to these developments from Google? As with Amazon, one can imagine ASOS enjoy good levels of direct traffic. Their eCRM programme is an established and increasingly sophisticated tool that keeps their customers and prospects informed, with direct routes back to the core brand and transactional site. However, we believe search engines play a more important role for ASOS or Boden within the clothing sector than for Amazon with books and DVDs, and therefore generate a relatively greater proportion of traffic for these online-only retailers.

With Google placing more and more emphasis on local listings, online shoppers will enter phrases such as “designer dresses” and increasingly be served results that includes listings for nearby retail stores (regardless of whether they use a location term within their search query). This is good news for retailers with physical stores such as TopShop, New Look, Next and the like. Not so good for their hitherto almost untouchable online-only competitor.

So, what’s to be done?
Much will depend on the relative weight of local searches within search engine’s algorithms. But as recent coverage suggests this weight will be heavy, it seems to us that digital brands such as ASOS or Boden have a number of options, which aren’t necessarily mutually exclusive;

1. The first option is to continue to innovate all elements of their digital content, both on their core site and ‘off the page’, in the hope that these innovations can offset the power of local search results. For example, it was announced only last week that ASOS would be trialling a new service called Me_tail, a virtual online fitting room service where visitors can create their own customised 3D model to match their own body shape and size before trying on different clothes and accessories. This kind of pioneering innovation is likely to appeal to online shoppers and keep pouring thousands of direct visitors back to the site on a regular basis.

2. The second option would be to evolve and expand their business model. If local search results become the dominant factor within searches, Boden could begin to suffer if they DON’T have a physical footprint. If they start to lose prominence in search rankings, it places greater importance onto their eCRM programme for sure, but whether this can offset their lack of visibility within Google remains to be seen.

While an even more refined eCRM programme should guarantee keeping the customers they already have, it doesn’t itself feel like a strategy for growth. Herein lies a wonder of this evolving business and communications world in which we live – a digital brand could start to suffer because it DOESN’T have physical shops. Lastminute.com have had their ticket booths for a while now – will we see Boden on the high street in the next year or two…?

3. Thirdly, if digital retailers choose to remain digital-only, it will be interesting to see how these retailers evolve aligning their increasingly rich content with YouTube (a hugely influential search engine in itself), something French Connection have already started to explore with ‘Youtique’. The ongoing evolution of how these retailers leverage dialogue through core social media properties such as Facebook and Twitter will also be fascinating.